Inside Ireland’s e-commerce powerhouse

18 Nov 2010

Few people realise this but buried deep in the industrial estates around Tallaght one of Europe’s most successful e-commerce operations is marching to a steady beat. Welcome to the Paddy Power nerve centre.

It’s already dark as I pull up outside Paddy Power’s online operations in Tallaght. The building is just like any other for miles around and could be a furniture factory or an engineering facility, but not one of Europe’s most successful internet operations.

Ushered inside, I am brought on a tour of the building and I have to say it is a uniquely Irish affair. At first nothing seems out of place, slightly old-fashioned and with a maze of corridors linking departments, it could be any office until you look around you a little more closely and you realise you’re surrounded by extraordinary people, ranging from statisticians and quantitative analysts to web developers and mobile app creators.

One moment you are standing in what could be the newsroom at The Sun newspaper with TV screens and a flood of newspapers strewn around the place – this is where the professional gamblers who decide the odds work and probably the most dramatic place to be outside of Cheltenham Racecourse on race day – and the next you’re standing in front of a bank of TV screens and radio booths where the TV feeds to every store and website is managed.

In a slightly quieter room off to the side sit statisticians and quantitative analysts crunching numbers, keeping everything on an even keel. On another floor in a vast room sit web developers, programmers, content creators, writers, app developers, you name it, a cross-section of the internet professional class.

Welcome to one of the most rapidly expanding e-commerce enterprises in Europe. Yesterday, Paddy Power announced it would be creating 500 new jobs in Dublin as well as a further 810 in the UK and 130 in Australia. Of the 500 new jobs being created in Ireland, 375 will be located in Tallaght, in areas such as e-commerce, technology, quantitative research, online marketing and risk management. Paddy Power’s international online turnover has grown by 315pc in the last three years and the group’s strategy is to exploit additional new opportunities that arise as international markets liberalise. The company is now ranked amongst Ireland’s largest employers with 2,200 people.

I am introduced to Paddy Power’s head of online Peter O’Donovan and the company’s head of sports book Darren Lovern.

“We are very much a digital economy company,” says O’Donovan, “competing in the e-commerce space.”

I meet O’Donovan and Lovern just as Paddy Power’s Android and iPad apps are being unveiled. “Entering the apps business aligns beautifully with our e-commerce strategy,” O’Donovan says. “Many of our guys are living in and around the edges of what technologies are coming next and most of our time is spent focusing on the quality of the interface.”

Lovern explained that at any one time Paddy Power could have a 1 million people audience concentrating on matches and races whether through their online websites or TVs in betting shops.

From apps to web-connected TV

“We are concentrating on smart filtering methods to manage varying content. We were among the first to launch apps for iPhones and Android and a lot of the time we are concentrated on Ajax interfaces and customisation. We are an e-commerce business and our product is our best bet.”

O’Donovan explained that connected web TV is an area Paddy Power is scrutinising quite heavily and doesn’t want to be left behind. “Some 50pc of Samsung TVs produced in the year ahead will be connected TVs.”

Lovern said that streaming sports to web-connected devices is going to be another big part of the business. “We are finding people becoming increasingly more and more comfortable watching live streamed sports content, particularly less mainstream sports like beach volleyball. The hardest part is ensuring the experience is consistent and preparing all the various presentation layers.”

O’Donovan said the company will be watching the next Budget carefully to see if finally long-awaited changes to Ireland’s gaming tax laws will come into effect. Paddy Power and other firms believe that as many as 8,000 jobs and potentially more could be created in Ireland by online casino companies if crucial legislation regulating online gaming is passed. So far, Ireland has failed to act and amend a dated 1956 Gaming and Lotteries Act which would open the doors to a thriving industry.

According to a report by DKM Consultants, if Ireland were to put in place the right legal regulatory infrastructure, it could attract businesses that would create employment and drive tax revenue to the exchequer. If Ireland were to capture just 5pc of the global online casino business, it would represent a local sector worth €2.2bn and generate 5,000-8,000 jobs with an average salary of €40,000 per annum.

There are other pressures at stake, as well, such as a threat to put a tax on online betting transactions.

“Ireland is home to some of the best internet jobs in the world, thanks to Facebook and Google, to name a few. But from an e-commerce perspective, Paddy Power is one of the few real e-commerce firms operating out of this country and not only is it a good place to get the full experience of running these operations, but any tax on this industry is a tax on Irish jobs. We employ 2,200 people in Ireland and 65pc of our business is in the UK and Australia. Any changes to taxes would create a real problem.”

Next on the horizon for Paddy Power from a technology perspective is expanding on its movement into iPhone, iPad and Android apps but also making use of social media platforms, like Twitter and Facebook.

“The customers will decide,” said Lovern. “We see Twitter as being a way of building brand loyalty. Whether Twitter will evolve into a transactional engine for Paddy Power, it’s way too early to say if it will be a killer app.”

“Ultimately the consumer drives the direction and R&D is what we do on a constant basis. We have luckily had more successes than failures with technology and our product development guys have been trying stuff in a targeted fashion. Success breeds success and our product development team is growing the fastest,” O’Donovan said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years